Monthly Archives: September 2010

SW Florida Home Prices

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It’s been over a month since we reported on single family home sale prices in Lee County, so we thought we’d provide an update.  Many people are questioning prices right now as tax notices went out recently, and many have been shocked at some of the new value assessments imposed by the Lee County property appraiser’s office.

Keep in mind that value assessments from the property appraiser’s office reflect values as of January 1, 2010 and not today’s values.  Its possible values have risen or fallen since January 1 depending on where you live.  Values do not move in tandem in perfect harmony.  Certain sectors of the market lead others, and when one moves another will follow to keep from having too much disparity.

SW Florida median Sale Prices
Home Sale Prices in SW Florida Fort Myers, Cape Coral

I could devote a whole article to this phenomenon we call “bunching” but we’ll save that for another day.  Since January, we’ve seen countywide price increases through April where median home sale prices peaked at $101,500.  Median sales price by definition means half the sales occur below that price and half occur over that price. Median sale prices have fallen since April to $93,500 which you can see by the chart.  New sales numbers are scheduled to be released September 24 which was after this article was written, so we’ll be keeping a close eye on sale prices and closed sales volume.

We did see an increase in pending sales last month which is a good sign going forward for closed sales, but pending sales were down about 19% from last August, and about the same for September, so official September sales would not surprise us if they came in down from last year.

Nationally unemployment is at 9.6% and the housing market is stalled, which does affect the SW Florida real estate market to some degree as northerners may be putting off selling in tougher times and moving to Florida.  Additionally, unemployment is a whopping 13.7% here in Lee County and rising, which does not help demand for housing, especially in the $150,000-$400,000 range.  The bottom of the market has indeed firmed up and homes listed below $100,000 are often scooped up quickly with multiple offers.  Homes priced much higher take longer as investors cannot flip them, the rents don’t always cash flow, and there aren’t enough 2nd home buyers to pick up that slack.

Season will be approaching again soon, and last year our northern friends did buy.  We’ll keep an eye out and see if that trend continues this year, and it very well could because the $150,000-$400,000 homes are still bargain buys, and everybody loves a bargain.

We’ll also report on pending sales in a few weeks.  Our guest on our Internet TV show will be Lee County property appraiser Ken Wilkinson.  We plan to ask him about housing values, and how to read the 3 columns in the trim notice to determine where your taxes will be for this year when tax bills are due in November.  The show is posted at Topagent.com

Interview wih Lee County Property Apprasier Ken Wilksinon

Segment 1

Segment 2

How to Buy a Bank Foreclosure in SW Florida

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One of the biggest frustrations buyers have is offering on a bank owned foreclosure and not getting it.  As a listing agent for many of the banks, sometimes buyers call me wondering why their offer wasn’t accepted, so I decided to write a 20 best tips on how to get your offer accepted.

The first thing buyers must understand is there is a lot of competition for these homes.  Typically bank foreclosures go fast, and for over asking price.  Everybody seems to want them.  So structuring your offer and submitting it correctly will increase your chances.

Keep in mind, listing agents must have all the required information, so if they ask for something upfront, they mean it.  Listing agents don’t have time to track your agent down for this info.  We attach a document to each MLS listing specifying what is required with the offer.

Tips on Buying a Bank Foreclosure Chart
How to Buy a Bank Foreclosure Chart

The reason is, the bank never sees your offer until one is accepted.  The listing agent must enter information into and online submission, and it must conform to what the bank asks for, and all fields must be filled out.  If a foreclosure has 20 offers, the listing agent doesn’t have time to call 15 agents and beg for information they required upfront.  Keep in mind, it takes awhile to upload 20 offers, and the listing agent may be dealing with 20 properties.

Listing bank foreclosures is very time intensive, and the listing agent coordinates everything from repairs to working out HOA fees, title issues, code violations, etc.  Providing the required information is the first step.

Secondly, consider that you’re probably competing against other buyers, and that many will be above asking price.  So how do you compete?  Consider a higher escrow money deposit, shorter closing time, and definitely a shorter inspection period.  Bank asset managers are also gauging the strength of each buyer, so you want to put your best foot forward in hopes of getting the property.

In many cases banks will counter multiple offers with highest and best.  Buyers are shocked when the bank doesn’t and just accepts one offer, so it always pays to pony up early on and go for it.  If you do get a highest and best form, assume the other buyer wants it as bad as you do, and act accordingly, because if you don’t, chances are you won’t end up with the home.

Be careful that your offer is written well and clearly states all fees and costs.  It is difficult to impossible to make changes later, and it could cost you the home.  Any change to contract later on opens up possibility home goes back out for rebid and you could lose it, so it pays to write offer correctly the first time.  Same applies with names; make sure everyone who wishes to take title is on contract from beginning. You may not be able to add names until after closing, which could require new title insurance and additional fees.

These are some very useful tips by an experienced foreclosure agent. Each bank has their own rules, so be sure to follow directions well.  Make sure you’re working with an agent who understands contract language. Many times we see financing contracts that don’t match up or specify some costs buyer is not allowed to pay under the buyer’s financing program, and the offer cannot be presented to bank until language is cleaned up which could cost the buyer the sale because of delays.  Be sure to work with an agent who has experience writing clear and concise contracts and understand financing in and out.

Bank foreclosures are prevalent in Fort Myers, Cape Coral, Bonita Springs, Estero, and Lehigh Acres, so following these tips will increase your chances, and ignoring them will most assuredly have you scratching your head wondering why the bank selected another offer.  Good luck and happy house hunting.

Search all Lee County Florida single family home foreclosures on MLS.

Search all Lee County Florida condominium foreclosures in MLS

Future of Real Estate Video Show SW Florida Goes High Defintion

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We recently experimented with shooting our TV show in High Def.  Previously we’ve used a mixing board much like a TV studio whereby we can mix camera shots, video graphics, etc, but it was standard definition TV.  Because we have a high definition TV we use anyway, and we shoot the show with High Def cameras, we though it would be nice to make everything more clear and understandable.

Future of Real Estate Video Show SW Florida Goes High Defintion
SW Florida Real Estate Market Update Video September 2010

Future of Real Estate Video Show SW Florida Goes High Defintion

Instead of having one track mixed in from a mixing board along with audio, we’ve gone to mixing each camera track and audio track and syncronizing them.  The reason I spell all this out is because agents all over the country have asked how we produce our show, and now that we’re making the change I thought I’d spell it out.  We then mix all the tracks together and produce one output and export.

Next week we’ll work on shooting the video so everything is in screen properly, or we’ll add another camera.  Let us know if you like the new changes.  View the latest show SW Florida Real Estate Market Update This week’s show covers pending home sales in Cape Coral Florida, Fort Myers, Bonita Springs, Estero, and Lehigh Acres.  We also cover inventory levels in Cape Coral, Fort Myers, and all of Lee County as we’ve seen varying reports of inventory levels reported lately.

Pending Sales Increase

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Pending sales lead to future closings, so studying pending sales over time offers a glimpse of what may occur in the 30-60 day future.  Obviously not every home closes, but it is a good barometer of what may close.

Nationally numbers were released this past week and pending sales increased 5%.  The SW Florida real estate market pending sales increased 4.11% over the previous month which is pretty much in line with national numbers.

Pending Home Sale Graph Fort Myers-Cape Coral
Pending Sales Fort Myers Cape Coral Florida Area

Pending sales are down 18.67% vs. pending sales last August, and this is in line with official sales numbers.  In July, sales were down 27% vs last year, so maybe when official numbers are released for August we won’t be down as bad as we were for July.

We’ve noticed a trend the last few election cycles whereby when people are uneasy about their jobs or the economy real estate sales tend to fall off just a bit in anticipation of the next election cycle.  Suffice it to say the November elections are on people’s minds, and how could they not be with all the ads on television during the primaries.  It is an encouraging sign that pending sales picked up in August over July.  Last year August sales were down slightly over July, so August isn’t always a month where we expect them to increase.

Interest rates are at record lows, and we’ve seen buying power in the $150-$300,000 price ranges increase substantially.  We believe sales could increase in this price range going forward into the next year as buyers realize they can buy much more home for far less money than they thought they could, even 1-2 years ago.

Inventory Levels in Fort Myers, Cape Coral, and Lee County Florida
Single Family Home Inventory Levels - pending Sales

As you can see from the attached chart, inventory levels in the Fort Myers and Cape Coral areas have been holding steady, and this is also true countywide as well, although the numbers are larger.  We’ve included a detailed pending chart as well showing pending sales from last year to present.  We’ll keep reporting what happens going forward on current real estate trends in SW Florida.

Be sure to check out our SW Florida Real Estate Market update for September directly from our Future of Real Estate Channel.

SW Florida Real Estate Market Update

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Official numbers were released last week, and as expected single family home sales dropped.  As you can see from the attached chart, there is some seasonality to this, but there are more reasons as well. 

Fort Myers Cape Coral Real Estate Closed Single Family Homes
SW Florida Real Estate Single Family Home Closed Sales

Sales are still well above 2006-2008 levels, but they are down against 2009 levels which was a record setting year.  Last year the market was filled with bank owned bargain inventory, and the trend this year has been less foreclosures coming to the market so we’ve been steadily selling off that bargain inventory. Actually the market never filled, but as foreclosure properties entered the market they were scooped up just as fast.  The pipeline has slowed this year. 

Combined with the expiration of homebuyer tax credits and high unemployment it’s quite predictable our market would slow.  Median home prices even began rising as less bargain sales were occurring.  In the last 3 months we’ve seen median prices decline from $101,500 in April down to $93,500 in July. 

So if less bargain homes are selling, it must be true that less regular sales are selling as well, or else the median wouldn’t drop.  This is also true, as distressed sales percentages in Lee County reached 64.18% in July vs. 54.66% in April.  Now that season is no longer here, it seems mainly the bargain homes are selling, and there are less bargains, so home sales are down, and non-distressed homes aren’t picking up the slack. 

Last year we predicted we’d see a No-Mans Land market when the foreclosure bargains dried up, and we’re seeing the beginning of this phenomenon now.  There is no major upward pricing pressure due to the economic times. 

Without rising prices, we won’t see increased builder activity, which means less tax dollars to the county government.  With fewer sales, we’ll see less doc stamps revenue to the state.  It’s a vicious cycle, so government better be prepared to make cuts because property tax values are also down which also cuts into county budgets. 

Real estate agents are out interviewing now because they’ve noticed their leads are down and they’re looking to go where there are some leads.  When the deals are gone, so is the investor interest, and we’re left with fewer residents looking to purchase.  We’re not seeing move-up buyers because people are uneasy about the economy and many can’t afford to sell because they owe more than their home is worth, so they can’t take advantage of moving up even if they do have solid employment.  The same goes with buyers looking to move-down.  You cannot move down to save money if you can’t afford to sell at today’s prices. 

This is Labor Day weekend and our market may be laboring, but it will be fine in the end. There are still good buys entering the market, and while we don’t see a lot of immediate upside pressure, we don’t see downward pressure either.  Even with slowing sales, we’re still the 2nd highest year on record.  Buyers looking to take advantage will have to be both quick and patient.  The early bird gets the worm when it comes to fewer foreclosure bargains, and the patient buyer gets the short sale, which can be a bargain if the buyer is prepared to wait.  And because 64.18% of current sales are distressed in some fashion, it pays to be both quick and patient.  The educated buyer with resolve is the real winner in this market.  The fearful buyer is missing opportunities and will kick themselves later.  

Perhaps when the government gets its act together and figures out which way is the road to recovery, we’ll see increased sales and prices.  Look for another homebuyer tax credit soon, or some other vehicle to spur the market, because real estate is traditionally 32% of GDP, and if we can kick start real estate, the economy may follow.

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